Zee Entertainment Enterprises (ZEE) has been directed by the National Company Law Tribunal (NCLT) to file its reply by October 7 on the plea moved by Invesco Developing Market Funds and OFI Global China Funds seeking that the company be directed to call for an extraordinary general meeting (EGM) as requisitioned.
A bench headed by Bhaskara Pantula Mohan asked ZEE to file its reply after its senior counsel Navroz Seervai pointed out that the interim relief sought by Invesco-OFI was the same as its final relief – which is direct the ZEE’s board to call for an EGM as per their requisition.
Invesco-OFI had approached the NCLT on September 29, seeking that ZEE be directed to hold an EGM as requisition by the largest shareholders and consider the removal of MD and CEO Punit Goenka and two other non-independent and non-executive directors from the company’s board. It also sought the induction of six new independent directors. As ZEE did not call for the EGM, Invesco approached the NCLT.
On Tuesday, Seervai argued that in the garb of getting an interim relief, Invesco is trying to get a final order from NCLT in its requisition notice case without giving it a chance to respond properly. He argued that demand for a court order to hold an EGM cannot be issued considering the facts of this case.
Seervai said, “Ad interim relief is for calling of meeting. Final relief is the same. Final relief cannot be granted as ad-interim relief.”
Besides, only in extraordinary circumstances mandatory injunction can be granted said Seervai.
Seervai further said that they should be given reasonable time to file their reply in case the tribunal was hearing the plea as a final hearing.
Janak Dwarkadas, senior counsel for OFI, argued that the entertainment company was indulging in forum shopping.
He argued that when the matter was pending before the NCLT, ZEE’s board held a meeting as a “formality” to reject their requisition while approaching the Bombay High Court challenging our requisition.
NCLT had heard the matter for a brief while on September 30, where ZEE’s counsel had said that their board would be holding a meeting in a day to decide on the requisition.
On October 1, ZEE announced that they have rejected Invesco-OFI’s requisition for calling of an EGM. The same day, ZEE filed a suit in the HC challenging the requisition.
Dwarkadas argued, “I say forum shopping because October 1 was a Friday. NCLT completed the matter on Thursday, September 30. The reject the requisition and on the same day, they lodge a plaint on October 1.”
“It is impossible to believe that a plaint of this magnitude is finalised, typed and lodged on the same day. This plaint takes away the power of NCLT to decide on the requisition,” added Dwarkadas.
Dwarkadas further argued that the board cannot decide on the legal validity of the requisition.
The NCLT will hear the matter on October 7.
